Thursday 9th Jul, 2020

India could become Australia’s next big coal export destination

Photo: Shutterstock
Photo: Shutterstock

A new report has outlined India’s potential as Australia’s next big coal export market, capable of creating at least 4000 Australian jobs.

The Coal in India 2019 report, prepared by the Office of the Chief Economist, said India’s rapidly growing demand for energy presents an opportunity for Australia to increase its thermal coal exports to the country.

Resources Minister, Matt Canavan, said the report provided a detailed examination of recent developments in India’s energy, electricity and mining policies, and how it could impact on its future demand for thermal coal.

“Australia is already a strong and reliable energy partner for India as it continues its rapid development trajectory and brings its people out of poverty. We can grow this relationship further,” Canavan said.

“The growth of India’s energy sector is truly astonishing. Since 2000, more than 500 million people have been ‘switched on’ to electricity, with coal providing around 44 per cent of India’s energy mix.

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“However, by 2017 there was still 168 million people living in India who had no access to electricity. That is almost seven times the population of Australia.”

Canavan said if Australia lifts its thermal coal exports to India to the same level as trade with China, an additional 37 million tonnes of high energy, low ash thermal coal could be exported.

“Based on current average prices for 2019, this would bring in an extra $3.4 billion in export income and provide around $240 million of additional royalties for state governments to invest in schools, hospitals and roads,” Canavan said.

“In line with that, we’d also be looking at potentially creating upwards of 4,000 new jobs for Australians in the coal sector, with these jobs predominantly being in rural and regional areas.

“And it is vital to remember that our coal is the best coal in the world – high in energy, low in ash, and therefore has a critical role in helping India reduce its own emissions.”

Canavan said the report found India’s coal consumption was likely to continue increasing over the next decade, and possibly beyond, to meet India’s growing energy needs.

“India is a large coal producer and its domestic production is growing. Australian coal is a perfect complement, not a replacement, for Indian coal. We specialise in a high-quality coal that can be easily blended with Indian coal to produce better outcomes for all,” he said.

“In 2018, Australia exported 5 million tonnes of thermal coal to India, which was 2.3 per cent of our thermal coal exports, and only 4.5 per cent of India’s thermal coal imports. We can do better than this.

“There is also room for us to boost our exports of metallurgical coal to India as their steel sector continues to grow. We currently export 45.3 million tonnes of metallurgical coal to India, which is around 25 per cent of our total metallurgical coal exports and just over 70 per cent of India’s import needs.”

To read the Coal in India 2019 report, click here.